The world prices of the main food products are beginning a marked downward trend, following experiencing astronomical increases since the beginning of the year.
After peaking in March, wheat prices fell 15% to average $380 a tonne in June, bringing their gains to 16% since the start of 2022. They continued to fall to fall at 307 dollars in mid-July, their lowest level since February, notes the DEPF, which reports to the Ministry of Economy and Finance in its latest economic report. This strong downward price correction is linked to the resumption of Ukrainian exports from the Black Sea ports. According to the FAO, world wheat production is expected to reach a record 778.3 Mt in 2021/2022, up 0.2% from the previous season, following abundant harvests in Australia and Argentina. For the 2022/2023 season, the FAO forecasts a decrease in world production (-1% to 770.3 Mt), marking the first drop in four years. Crop declines in Australia, India, Morocco and Ukraine are likely to outweigh projected increases in Canada, Iran and Russia.
Corn prices averaged $322 per ton in the first half of 2022, up 22% year-on-year. This surge is linked to supply disruptions from Ukraine (which accounts for 15% of world corn trade) and high energy prices. However, continues the same source, following reaching a peak of 348 dollars per tonne in April, maize prices fell by 4% to settle at 336 dollars per tonne on average in June, bringing their gains to 27% since the beginning of 2022.
According to the FAO, global maize production for the 2021/2022 season is expected to reach a record 1,210 Mt, 4.3% above the previous harvest. Higher production in the United States, China and Ukraine offset lower production in Brazil. For the 2022/2023 season, the outlook for world supply is less favorable (-1.2% to 1,195 Mt). The expected drop in production in the United States and China would be partially offset by an increase in the crop in Brazil, supported by a higher area. For Ukraine, the context remains uncertain as to production, storage and export capacity.
As for soybean prices, they stood at $695 per tonne in the first half of 2022, up 16% year-on-year. They hit a record high of $737 a tonne in June, marking gains of 33% since the start of 2022 and 20% year-on-year. However, soybean prices fell sharply recently to stand at 561 dollars per ton on July 19, their lowest level since December, marking a drop of 27% since their peak in June (766 $/t), in due to weak demand and easing supply problems.
According to the FAO, world soybean production in 2021/22 would have recorded 350 Mt, down 4.8% from the record of the previous season, due to the fall in crops in South America (Brazil, Argentina, Paraguay), affected by unfavorable weather conditions (drought linked to La Niña). However, world soybean production in 2022/23 is expected to recover to a new record (+10.6% to 388 Mt). Brazil is the largest producer and exporter of soybeans in the world, ahead of the United States. China remains the leading importer of soybeans with more than 90 Mt, representing more than 60% of world trade.
It should be noted, continues the note on the economic situation of the DEPF, that the crisis in Ukraine is exerting additional pressure on the prices of vegetable oils. The Black Sea region represents regarding 60% of the production and 80% of the exports of sunflower oil in the world.
In addition, world raw sugar prices (ISA) recorded an average of 416 dollars per tonne in the first half of 2022, up 16% year on year. They averaged $418 a tonne in June, down 4% from their peak in April, trimming their gains to 0.6% since the start of 2022 and 9% from a year ago. Sugar prices are supported by high oil prices, encouraging Brazilian factories to divert sugar cane to the production of ethanol, to the detriment of sugar. The International Sugar Organization (ISO) has revised its projection of the world sugar supply balance for 2021/22, now expecting a supply surplus of 0.2 Mt once morest a deficit of 1.9 Mt in february. The organization expects an even larger surplus for the new agricultural campaign (2022/23, October-September) at 2.8 Mt, with production expected to reach 177.4 Mt and consumption expected at 174.6 Mt.
Additionally, global sugar prices are expected to be subdued, supported by robust exports from India and Thailand, expected at around 9-10 Mt each in this 2021/2022 marketing year.
